The bulk of the electricity generation in Sri Lanka is from hydropower and the present demand growth rate is 10%. In order to meet the growing demand, the Upper Kotmale Hydro Power (UKHP) project has been planned. The project has an installed capacity of 150MW and is capable of providing an annual energy of 530GW. The development of the project is expected to contribute no only to national social and economic development through provision of economical energy but also to rural development in the area through various infrastructural developments.

The EIA for the project was done in 1994. The Ceylon Electricity Board (CEB) being the project proponent sought environmental approval for the implementation of the project from the Ministry of Power and Energy which was the Projector Approving Agency. Members of the Technical Evaluation Committee having examine the EIA report did not recommend the project saying that the CEB has failed to study and examine an option known as “YOXFORD” which would give potentially more power and was positively more environmental friendly. Central Environmental Authority (CEA) decline to give concurrence for the approval and the Ministry of Power &energy rejected the project.

An appeal was made to the Secretary of Ministry of Environment and the Secretary rejected the appeal and requested the CEB to apply for an environmental clearance from the CEA with a new EIA after studying and examining the “YOXFORD” option. Subsequently the CEB submitted an addendum to the original EIA examining the YOXFORD option. CEA having studied the report rejected the project even in the new report the YOXFORD option has not been studied properly.

A second appeal was then made to the Secretary, Ministry of Environment by the CEB against the CEA decision. Further detailed studies on alternatives were completed in 1996 and the Secretary of the Ministry of Forestry and Environment granted approval for the project under the National Environment Act in July 1998 subject to strict adoption of proposed mitigation measures to minimize possible environmental impacts, which included the development of a watershed management plan, maintenance of daytime flows over the waterfall, monitoring of groundwater levels, an assessment of biodiversity, management of tunnel waste and a resettlement program. This decision was challenged in the Court of Appeal in October 1998. The Secretary of the Ministry of Forestry and Environment gave final order in March 2000, subsequent to the settlement of the appeal.